In a conventional credit card transaction, a credit card holder presents a financial account card, such as a credit card, to a merchant. The merchant typically swipes a magnetic stripe on the credit card through a card reader that is built into or attached to a point-of-sale (POS) terminal. The magnetic stripe generally includes account information, such as an account number of the card, an identity of the card holder, and an expiration date of the card. Once the merchant has swiped the card through the card reader, the account information is transmitted to the POS terminal. Alternatively, instead of the merchant swiping the card, the credit card holder may personally swipe the card at a self service check out station or may insert the card into a card reader built into, for example, a gasoline pump. Once the card reader has read the card data, the card data is transmitted over a secure network, authenticated, and ultimately used to authorize a transaction. In any of these kinds of transactions, however, the credit card must be physically read by a magnetic stripe reader in order to obtain the card data that is stored on the magnetic stripe.
It is also known in the art that, to attract new customers, a credit card issuer may offer a new credit card account having a balance transfer sub-account in addition to a credit line sub-account. With such an offer, the prospective cardholder may transfer the balance of a debt owed on another credit card account to the offered balance transfer sub-account. Upon transferring the balance, the issuer pays off the debt on the cardholder's original account and, after expiration of an initial grace period (if any), then charges the cardholder interest on the transferred balance. When the cardholder makes payments to the issuer, the payments are split between the credit line and balance transfer sub-accounts by a predetermined arrangement (e.g., in proportion to the balances on the respective accounts).
Determining whether the new credit card offers more favorable terms is often difficult for the new customer. For instance, the customer must often call the issuer to compare terms of the customer's existing credit card account with the offered credit card account. Further, because the terms of an advertised credit card account may differ from the terms of the account actually offered after completing an application process, the customer typically needs to compare the account terms a second time after the issuer accepts the customer's application and offers an actual credit card account. Moreover, the customer must often wait a substantial amount of time to receive the new credit card and thus cannot use it to make purchases in the meantime.
Further, as the prevalence of wireless devices continues to increase, new methods of storing and transmitting credit card data have begun to emerge in the art. For example, RFID (radio frequency identification) tags have been used to transmit payment information. RFID tags are microchips that may transmit and receive data, as well as store and encrypt that data. An RFID tag thus acts as a transponder by transmitting a radio frequency signal when it receives a query radio signal from another device. Typically, the other device is an RFID reader that sends a query signal requesting a nearby RFID tag to transmit data to the RFID reader. When the RFID tag receives the query signal, it may be powered into an “on” state. Alternatively, the RFID tag may have its own independent power supply. In either case, when an RFID tag receives a query radio signal, it may respond by transmitting data to the reader up to a distance of a several inches or feet away, depending upon its power capabilities. Such RFID payment technology has not, however, overcome the disadvantages discussed above with respect to offering new credit cards having balance transfer sub-accounts.
Accordingly, there is a need for a way to offer new financial accounts to customers of existing accounts that may overcome the above disadvantages.